German court backs gay rights on inheritance tax

KARLSRUHE, Germany (Reuters) - Germany’s highest court has ruled a law which makes homosexuals living in civil partnerships pay higher inheritance tax is unconstitutional.

The Federal Constitutional Court said there were no legal grounds for taxing gay people who lost their partner differently from heterosexual married couples, and gave the government until 2011 to compensate those subject to the previous rules.

The Karlsruhe-based court said on Tuesday the fact that heterosexual marriage could produce children did not justify higher taxation for homosexuals over inheritance.

Germany has permitted civil unions for homosexuals since 2001. According to the law, surviving partners had to pay higher inheritance duties, and were also granted a lower tax exemption threshold than their heterosexual counterparts.

Depending on the inheritance, homosexuals have been subject to a rate of taxation that could be up to 20 percentage points higher than heterosexual widows or widowers.

The thresholds were evened out in 2008, though so far the government has only put forward a draft bill to render both sets of couples equal before the law on taxation, the court said.

It was responding to an appeal lodged by a man and a woman whose respective partners had died in 2001 and 2002.

Germany’s LSVD lesbian and gay association welcomed the decision, but said the job was not done yet.

“Lawmakers must now act as quickly as possible to ensure there is complete equality on income tax and provisioning for civil servants,” spokesman Manfred Bruns said in a statement.

“It’s against our constitution for civil partnerships to be put at a disadvantage compared to married couples,” he added.

Writing by Dave Graham